A group of Israeli energy companies confirmed for the first time Tuesday that they are talking with officials in pursuit of exporting natural gas to Egypt, Turkey, Jordan and the Palestinian Authority.
A group of Israeli energy companies confirmed for the first time Tuesday
that they are talking with officials in pursuit of exporting natural gas to
Egypt
,
Turkey
,
Jordan
and
the Palestinian Authority.
"The partnership is evaluating various options for export," according
to statement from Avner Oil Exploration Ltd. Partnership (AVNRL.TV), which owns
stakes in two large Israeli offshore natural gas fields, along with Delek
Drilling Ltd. Partnership (DLEKG.TV) and Houston-based Noble Energy Inc.
Tuesday's confirmation follows an Israeli government decision in June to
earmark a certain amount of Israeli gas for selling to neighboring countries as
part of its export plan.
Israel
faces
challenges in finding foreign markets for its gas, given the political
challenges with its neighbors as well as a volatile global market for natural
gas. Israeli companies need to work quickly to secure contracts and markets, as
more natural gas discoveries are paving the way for a possible oversupply in
the market, analysts said.
"I think it's very important for the parties to move ahead and not to miss
this window of opportunity," said Roni Biron, an energy analyst at UBS
Israel. "In general, there is a clear need from
Jordan
and
Egypt
for
natural gas from
Israel
. It
makes sense."
In June, Jordanian officials told the Wall Street Journal they were holding
talks on buying gas from
Israel
.
While such a deal could result in criticism of the monarchy from the Arab world
over further normalization of relations with
Israel
, it
would also solve
Jordan
's
energy shortages.
Jordan
has
faced supply interruptions to the gas it gets from
Egypt
since
2011, following the fall of former president Hosni Mubarak's regime. Gas from an
Israeli pipeline would be cheaper than liquefied natural gas imported from the
Gulf countries, another option
Jordan
is
examining, according to officials in
Jordan
.
Egypt
also
faces energy shortages.
If
Israel
does
not succeed in building a gas pipeline to a neighboring country, it would have
to invest in the more expensive process of liquefying the gas to export it
further afield, to
Europe
or the far East.
The two Israeli fields, Tamar and Leviathan, discovered in 2009 and 2010, have
the potential to meet the state's domestic energy needs for decades, as well as
bring billions of dollars to state coffers through exports. Most of the gas
from Tamar, which began production in March, has been promised in contracts to
the domestic market. The government recently granted approval to export about
40% of
Israel
's gas
reserves, mainly coming from the still-undeveloped Leviathan field. But that
decision is being challenged in a court case by political parties who claim the
legislature, not just the cabinet, should have final say on the issue.
At 1301GMT, shares of Avner were down 0.005 shekels, or 0.18%, at ILS2.70
($0.76), and shares of Delek Drilling were down ILS0.03, or 0.19%, at ILS15.72,
in a lower Tel Aviv market.
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